The GBP to AUD conversion is seen trading at 1.6091 at the time of writing, but there is a good chance it could go below the support line at 1.60 we are told.

1.60 has long been an important support level for the currency - all through the post-referendum sell-off in GBP we have noted the exchange rate’s ability to more or less make 1.60 a line in the sand.

Matt Simpson – Senior Market Analyst at Think Markets - tells us that there is however a chance Sterling could break below this level:

"GBPAUD is very much in focus around Theresa May's speech today.

"We expect the Australian Dollar to remain supported in the lead up to Trump's inauguration, so if May comes out with a hard Brexit message then GBPAUD could make its way towards 1.059 en route to the 1.5786 lows.

"That said, as it has been widely reported that a hard Brexit message is anticipated, then anything short of this could result in a higher Sterling.

"As the technicals remain bearish we see any upside as limited at this stage. Whilst we remain below the 1.64 swing high we prefer to fade into any rally."

Note that the RSI - the line in the bottom panel - is below 30.

This is significant in that it indicates that this market is oversold.

An RSI above 70 indicates a market that is overbought, while at 30 and below the market is oversold and ultimately due a correction or period of consolidation.

The RSI rarely spends time in the extremes either side of 30 and 70.

Therefore, on this technical indicator alone we could expect some relief for Sterling. One caveat though is that oversold conditions can linger, as was the case in October 2016.

AUD/USD: Steady, for Now

Looking ahead for the exchange rate, Simpson notes:

AUD remains firmly supported above 0.7428, yet equally capped by the December high of 0.7528.

Unless Thursday’s employment data throws a curve ball then we doubt we’ll see any epic break before Trump’s inauguration.

Trump to Break Holding Patterns

Simpson argues this may not continue to be the case if Trump enforces his scathing attacks on China once in Office:

"As Australia is one of China's larger trade partners we'd expect AUD to become the FX punchbag surrounding any spat between US and China.

"If Trumps maintains his protectionist manta and targets China, for example, we may find that AUDNZD falls as Australia is their larger trade partner.

"AUDUSD is likely to topple over below 74c as Greenback bulls return and risk-off sentiment dominates.

"If his inauguration speech is more pleasant and focusses on domestic issues (like his acceptance speech) then a risk-on environment will likely ensure and favour AUDNZD to outperform in line with the bullish technicals.

"Although looking further out, if Trump does enforce his import tariffs then it is not too difficult to imagine new trade deals which could favour AUD."